Can Bhc regulate the form of agreement used with the General Manager?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
The day-to-day operations of your Master Franchise Business and Master Franchise BHC Restaurant must be always managed by you or a full-time "General Manager" who has satisfactorily completed our training program. Your General Manager's responsibilities will be to (i) establish, implement and monitor food safety and quality policies, (ii) establish measurable food safety and quality objectives, (iii) ensure compliance with quality and food safety policies and procedures at all Master Franchise BHC Restaurants with the Development Area, and (iv) develop and implement business continuity policies. Your General Manager need not have an equity interest in the business but must agree in writing not to compete against us and to preserve confidential information to which they have access and not to compete with you, us, and other franchisees. We may regulate the form of agreement that you use and be a third-party beneficiary of that agreement with independent enforcement rights.
Source: Item 15 — Obligation to Participate in The Actual Operation of The Franchise Business (FDD pages 42–43)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc may regulate the form of agreement that a franchisee uses with their General Manager. Bhc can also be a third-party beneficiary of that agreement, giving them independent enforcement rights.
This means that Bhc has the right to dictate the terms and conditions included in the agreement between the franchisee and their General Manager. This is likely to ensure that the General Manager is bound by certain obligations to Bhc, such as non-competition and confidentiality.
As a third-party beneficiary, Bhc can directly enforce the agreement against the General Manager, even though Bhc is not a direct party to the agreement. This provides Bhc with an additional layer of protection for its interests and confidential information. A prospective franchisee should carefully review the specific requirements Bhc has for the General Manager agreement to fully understand their obligations.